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Japan’s economy suffers sharpest contraction since 2008 financial crisis

by Karen Faulkner, Worthy News Correspondent

(Worthy News) –
Japan’s economy has suffered its strongest contraction, shrinking an annualized 27.8% in April-June amid the COVID-19 pandemic, Reuters reported Monday. This was steeper than the worse decline suffered in the 2008 financial crisis.

Japan has the third-largest economy in the world, with its GDP exceeding $5 trillion in 2019.

Analysts had estimated a 27.2% decline for this third straight quarter of contraction in Japan’s economy. Government data showed that GDP shrank 7.8% in April-June on a quarter-on-quarter basis, Reuters reported. This was compared to the median prediction of a 7.6% decline.

While global markets and US futures gained on Monday, Japanese stock sank, NBC Washington NBC reported. The Nikkei 225 in Tokyo fell 0.8% to 23,096.75.

Quoted by Washington NBC, Stefan Angrick of Oxford Economics observed in a report: “The road ahead looks choppy as a resurgence in Covid cases will weigh on domestic and overseas spending.”